Pima County solar project raises questions

Pima County has contracted to buy $22 million worth of solar-produced electricity over a period of 20 years from Solon Development, a company which received a no-bid contract from the County. Solon will built 11 solar arrays over parking lots.

Pima County will pay a fixed price of 12.8 cents per kilowatt over the life of the contract, versus 12.1 cents per kilowatt the County now pays to Tucson Electric Power (TEP). Doing a little math shows that while the TEP price remains at 12.1 cents, the County (taxpayers) will be spending about $60,000 more per year for electricity under this deal. Pima County, however, claims there will be a savings of $4.5 million over the life of the contract.

How did the county come up with that number? It seems that Solon Development has a crystal ball. They published a chart (see below) of anticipated TEP rate hikes (see column F). A call to TEP reveals that even TEP doesn’t know what its future charges will be. Any rate changes must be approved by the Arizona Corporation Commission. Here is the chart:

Solon rate estimate

There is something suspicious about Solon and the timing of the contract. The Arizona Daily Star characterized Solon as a local company and, indeed, they have a office in Tucson. But here is what I think needs more explanation: Solon Development, LLC was created on April 17, 2015 and the County awarded it a contract on May 5, 2015, less than three weeks later. What went on behind the scenes for such an apparently rapid decision? The graphic below shows the incorporation notice:

 Solon creation

Although Solon is touted as a local company, creating the impression of awarding jobs locally, Solon is actually part of a company based in the United Arab Emirates (UAE). Here is the chain of ownership:

While “Solon Development, LLC” may technically be local, it is actually a subsidiary of Solon Corporation, a German company. According to Solon Corporation website, their legal address is SOLON Energy GmbH, Am Studio 16, 12489 Berlin, Germany.

Also on their website, they brag: “Founded in 2007, SOLON Corporation is a subsidiary of the SOLON Group, a leading international provider of solar solutions for residential, commercial and utility-scale applications. The SOLON Group, one of oldest pure play solar companies in operation, was established in 1997 and operates subsidiaries in Germany, Italy, Australia, India and the U.S.”

Solon would seem to have a great deal of experience. So why did they go bankrupt? According to a story in Greentech Media, “Solon joined Solyndra, Evergreen Solar, and SpectraWatt in 2011’s bankruptcy pool.” But that’s not all. The story goes on to say “The next chapter in the Solon saga was announced today [March 6, 2012]. Microsol, a vertically integrated United Arab Emirates (UAE)-based cell, module and system manufacturer, acquired essential components of the insolvent Solon SE and its subsidiaries, including U.S.-based Solon Corporation.”

So, our very own local company is not so local.

Was Pima County in negotiations with the parent company before creation of Solon Development? In the chart above, does the expected performance (column A) take into account that PV solar panels typically produce only about 20% of its rated capacity? Will County taxpayers really save money?